2. BRRRR Strategy and your qualifications
This is the second in a multi-post series on financing your rental investment properties using the BRRRR strategy.
Terms for financing your BRRRR property can vary depending on the type of asset. Before we can talk details of your properties and terms, we need to discuss your qualifications as a credible borrower.
For most seasoned investors, there is a story to tell. Every investor has a story to tell, right? Well, what if you are a new investor with no story, no track record, or no history of investing? How can you possibly get a loan?
Well, I am here to tell you that there is so much money available, just about anybody can obtain a loan. But (there is always a “but”) lenders still have some baseline requirements.
Let us look more closely at the minimum requirements.
First, the minimum FICO credit score is 660, at least with our lenders. This is a hard stop. We recently had someone with a 659 credit score and no exception would be made. We could not get him funded.
If there is only one individual applying for the loan, the lender will use the lowest of the three credit scores (Experian, Trans Union, or Equifax). If there are multiple parties, the lender will either select the lowest of all scores or use the lowest middle score.
Second, your investing experience in the last 24 months. If you are new and requiring a bridge loan for your flip before you roll it into a refi loan, you are a Tier One investor so expect the highest rates (interest, origination fee, processing fee). If you are refinancing an existing turnkey SFR as a Tier One investor, the interest rate may be a half point higher than an experienced investor. If you are financing a multi-family, rental portfolio or ground up construction loan, these loans require much more scrutiny from the lender. Lenders prefer experienced investors for these loans.
Obviously, there are other variables that will determine your final loan rate and terms, but your credit worthiness and experience level are the two most important criteria to establishing a relationship with the lender.
To view previous post for this BRRRR series, follow us at www.facebook.com/REITrader
Looking for funding? REI Trader, LLC has purchase, refi and fix and flip loan programs for your SFR, rental and multifamily portfolios. For rates and terms, please email jonathan@reitrader.com
Jonathan Mednick has been real estate investor since 2002. He is a co-founder of REI Trader, LLC and a licensed real estate broker since 2011 with Real Equity, Inc. He has extensive experience in all areas of real estate investing and lending. To date, he has completed over 1,700 projects.
This is the second in a multi-post series on financing your rental investment properties using the BRRRR strategy.
Terms for financing your BRRRR property can vary depending on the type of asset. Before we can talk details of your properties and terms, we need to discuss your qualifications as a credible borrower.
For most seasoned investors, there is a story to tell. Every investor has a story to tell, right? Well, what if you are a new investor with no story, no track record, or no history of investing? How can you possibly get a loan?
Well, I am here to tell you that there is so much money available, just about anybody can obtain a loan. But (there’s always a “but”) lenders still have some baseline requirements.
Let’s look more closely at the minimum requirements.
First, the minimum FICO credit score is 660, at least with our lenders. This is a hard stop. We recently had someone with a 659 credit score and no exception would be made. We could not get him funded.
If there is only one individual applying for the loan, the lender will use the lowest of the three credit scores (Experian, Trans Union, or Equifax). If there are multiple parties, the lender will either select the lowest of all scores or use the lowest middle score.
Second, your investing experience in the last 24 months. If you are new and requiring a bridge loan for your flip before you roll it into a refi loan, you are a Tier One investor so expect the highest rates (interest, origination fee, processing fee). If you are refinancing an existing turnkey SFR as a Tier One investor, the interest rate may be a half point higher than an experienced investor. If you are financing a multi-family, rental portfolio or ground up construction loan, these loans require much more scrutiny from the lender. Lenders prefer experienced investors for these loans.
Obviously, there are other variables that will determine your final loan rate and terms, but your credit worthiness and experience level are the two most important criteria to establishing a relationship with the lender.
To view previous post for this BRRRR series, follow us at www.facebook.com/REITrader
Looking for funding? REI Trader, LLC has purchase, refi and fix and flip loan programs for your SFR, rental and multi family portfolios. For rates and terms, please email jonathan@reitrader.com
Jonathan Mednick has been real estate investor since 2002. He is a co-founder of REI Trader, LLC and a licensed real estate broker since 2011 with Real Equity, Inc. He has extensive experience in all areas of real estate investing and lending. To date, he has completed over 1,700 projects.
Category : Blog